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Biogen Stock Slumps To 2-Year Low As Medicare Limits Alzheimer's Drug Coverage

The U.S. Centers for Medicare and Medicaid Services said it will only cover treatment with Aduhelm, Biogen's Alzheimer's treatment, if patients are enrolled in a clinical trial.

Biogen  (BIIB) - Get Biogen Inc. Report shares slumped to a two-year low Wednesday after the U.S. government's Medicare program said it will limit access to the drugmaker's newly-approved Alzheimer's treatment.

The U.S. Centers for Medicare and Medicaid Services said it will only cover treatment with Aduhelm, Biogen's Alzheimer's treatment, if patients are enrolled in a clinical trial. The decision, which could be changed after the CMS addresses public comments in April, would limit use of the drug that was controversially approved by the Food & Drug Administration in June of last year.

The decision follows Biogen's move late last month to slash the price of Aduhelm by around 50%, to $28,200 per year, in order to help expand its potential reach.

"It is imperative to change this draft decision to be aligned with reimbursement for other therapies for progressive diseases, where patients have immediate and equal access to medicines approved by the FDA," Biogen said in a statement. "The FDA’s accelerated approval was supported by clinical data showing that Aduhelm impacted the underlying pathology of Alzheimer’s disease."

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"If a final (National Coverage Determination), expected to be issued in April, continues to require a randomized controlled trial as outlined in this draft, it would likely take in excess of a year to begin enrolling patients, further delaying reimbursement for Medicare beneficiaries," Biogen said. "It is also particularly concerning that this draft implies that some Medicare beneficiaries will receive a placebo instead of a treatment they are seeking."

Biogen shares were marked 9.4% lower in early Wednesday trading to change hands at $220.85 each, a move that extends the stock's six-month gain to around 37.3%.

Alzheimer's disease is a progressive brain disorder that affects more than 50 million people around the world. To date, no drug has been found to address the disease, which can accelerate into dementia and other more serious cognitive conditions.

The FDA approved Aduhelm for the treatment of Alzheimer’s in June through its accelerated approval pathway, which can be used for a drug for a serious or life-threatening illness that provides a meaningful therapeutic advantage over existing treatments. 

Biogen said in November that Aduhelm "significantly" lowered blood levels in abnormal tau proteins, which are linked to neuronal damage in neurodegeneration, including Alzheimer's disease.

Aduhelm, Biogen noted in earlier studies, has been show to erode amyloid beta, a plaque which builds up around the brain and can lead to neuron damage.